The News/Media Alliance published an extensive research paper, “How Google Abuses Its Position as a Market Dominant Platform to Strong-Arm News Publishers and Hurt Journalism,” in which countless news publishers were interviewed and detailed how Google has used and abused news content over the course of several years through wielding their dominant position to strong-arm news publishers into giving away their content, all while Google profits from it. New revelations include anticompetitive behavior among and between Google and Facebook to further cement their market dominance.
Like most industries, news media outlets have made business decisions impacting revenue and the business landscape. Not all of those decisions have paid off. One such decision was made almost twenty years ago to allow news content to be used on search and social platforms when the value exchange was fair, and traffic produced revenue through advertising. However, today, that value exchange is nearly nonexistent. It has been reported that 65 percent of users stay within the walled gardens and do not click through. And when few do click through, the ad tech tax is imposed, where the platforms take up to 70 percent of every digital advertising dollar because they also dominate the ad tech ecosystem, which feeds off the data collected inside their products and across the web. There is no longer a fair exchange of value, and no one publisher alone can alter this dynamic.
The White Paper outlines several ways in which Google uses news content to its advantage – and to news publishers’ detriment – across its products and services:
- The use of news content through AMP (Accelerated Mobile Pages), Google Discover, Google News app, Google Assistant, and Search have become a “walled garden” in which publishers and consumers are increasingly forced or encouraged to stay.
- Evidence that AMP, in which users read articles served by Google, benefits the platform to the detriment of news publishers who lose advertising revenue, reader data, and subscribers in comparison to organic search.
- New evidence presented to the courts of anticompetitive practices around “header bidding” – an auctioning tool that competes against Google, producing a higher payout for publishers – was discouraged by Google as an intentional move to improve its financial gain in advertising auctions.
- Revelations that Facebook substantially curtailed its use of header bidding in return for Google giving Facebook a leg up in publishers’ web display and developers in app ad auctions, allocating a portion of the wins to Facebook and helping Facebook’s ad network, FAN, beat the competition.
As the Senate markup of the Journalism Competition & Preservation Act (JCPA) approaches (the Senate text was released in late August and it was listed to the Senate Judiciary Committee agenda for markup on September 8), critics of the bill have referred to it as a way to “prop up an industry that has largely failed to address its business problems” unrelated to the platforms. The White Paper proves this is not the case. If the platforms were required to come to the table and negotiate with news publishers for fair compensation for use of their content, as the JCPA specifies, it would address at least one critical piece of the gross marketplace imbalance with the dominant platforms.
Danielle Coffey, Executive Vice President and General Counsel at the News/Media Alliance said, “Google extracts revenue from valuable news content by deliberately and systematically delivering personalized information to users to keep them within their walled gardens. This fuels their engine of scraping reader data to sell their information and target them with ads.” Coffey continued, “There remains little bargaining power and, as a result, news publishers are forced to consent to nearly unlimited uses of their content in exchange for scraps to cover the tremendous investments it takes to produce quality journalism. If this continues, the production of quality local news content will be irreparably harmed.”
In the White Paper, the Alliance recommends passage of the Journalism Competition & Preservation Act, which would allow news publishers to collectively negotiate for fair compensation from the tech platforms.
The White Paper can be found here.
Members of the News/Media Alliance staff have contributed to this post.